With all due respect to the Pentagon, humankind has not invented a more complex organization than the modern academic medical center. The combination of high tech and high touch, the Byzantine regulations, the toxic medico-legal environment, the extraordinary pace of change…. Well, you get the idea.
But the most daunting challenges stem from trying to satisfy the AMC’s tripartite mission: providing high-quality, safe, patient-centric, and efficient clinical care across a spectrum of services; training the next generation of physicians and other caregivers; and performing cutting-edge research and innovation. Think about blending the missions of Target, Apple, Yale, and Nordstrom, and you’ll have a sense of the problem.
Unfortunately, the typical management structure of academic medical centers makes running this monstrosity even more difficult. The vast majority of AMCs are actually two (if not more) organizations blended (sort of) into one: a school/university, and a clinical delivery system. This structure arose through happenstance, and the fault lines it creates are increasingly jagged.
A select few institutions place a single individual atop both the academic and the care delivery pyramids. The most prominent is my alma mater, the University of Pennsylvania, and so this week’s appointment of my friend Larry Jameson to be Penn’s healthcare czar gives me an opportunity to discuss how AMCs came to be organized as they are, why this structure doesn’t work very well, and why placing the reins of power in the hands of a single individual makes lots of sense, assuming you can find the right person. (Coincidentally, one of the handful of other institutions with a single dean/hospital leader, the University of Chicago, also selected a new chief last month, Ken Polonsky, chair of medicine at Washington University in St. Louis and, like Jameson, a colleague and friend from the ABIM board).
To understand the importance of the Penn model and Jameson’s appointment, let’s begin by reviewing the evolution of the modern AMC. (A big thanks to Ken Ludmerer; I’ve drawn much of the following discussion, and all the quotes, from his superb treatise on medical education, Time to Heal.)
The Evolution of the Modern Academic Medical Center
Abraham Flexner, whose groundbreaking 1910 report created the blueprint for academic medicine for the next century, wouldn’t recognize today’s AMC. For one thing, Ludmerer reminds us that Flexner’s report never once mentions residency training – in his day, four years of medical school were felt to be enough to prepare a physician for practice.
Following World War I, internships and residencies sprouted, driven by advances in medical practice and the formation of specialty boards like the ABIM, which forced physicians to complete post-graduate training and pass rigorous exams. While medical schools were pressed into relationships with hospitals to offer clinical experiences for trainees, medical school deans had no interest in managing these facilities. Writes Ludmerer, the decision for medical schools to allow hospitals to oversee post-graduate education was “a choice made by medical schools – one that in a later period would return to haunt them,” as the hospitals gradually became the site of much of the power… and the bucks.
Starting in the 1920s with Columbia Presbyterian, the AMC – the co-location and partnership of the teaching hospital and its affiliated medical school – became a dominant model. At first, hospital and school played nicely together. One Depression Era dean, with what proved to be unfounded optimism, predicted that medical schools and teaching hospitals would “so intermix [their] budgets… that the university would never be able to separate them.”
Although schools and hospitals were now two very large businesses with independent bottom lines and related but divergent missions, they remained close partly because hospital leaders appreciated their dependence on their academic partners to recruit top notch faculty, offer innovative therapies, and bring in high quality trainees to staff the wards. Ludmerer describes a 1955 conversation in which the director of one of the brightest stars in the academic galaxy, the Massachusetts General Hospital, was asked to name the single factor that made his hospital “the dynamic, vitally active, enthusiastic institution that it is today.” “Fortunately, the answer is easy,” he replied. “The Harvard Medical School.”
Remarkably, in the 1950s, medical schools were so focused on their missions of education and research that they actively fought pressures to expand their clinical empires. In 1956, the dean of Cornell Medical College said, “I can assure you that no sane or responsible medical school administration would want to be responsible for the staffing or other problems of more beds than are absolutely necessary for the clinical instruction of students.”
This attitude changed with the stroke of a pen in 1965, with the formation of Medicare and Medicaid. With billions in new clinical revenues at stake, writes Ludmerer, “…the master increasingly became patient care, to the subordination of both teaching and research and to the inversion of the university ideals upon which the modern medical school had been founded.”
Around the same time, federal funding for research skyrocketed, leading to massive growth in the number of academic faculty hired to perform NIH-funded research. And so, by the 1970s, the dichotomy was complete: the medical school dean was in charge of education and the growing research portfolio, while the hospital director ran the burgeoning clinical enterprise. In a little-noticed but momentous decision, Medicare payments to support residencies and fellowships were given to the hospital chief to distribute, not the dean, department chairs, or program directors. The power center of the academic world was now squarely in the medical center’s C-Suite.
Events over the past generation have only served to accentuate the bifurcation between the school’s and medical center’s missions. Growing pressures on AMCs to maximize profits have resulted in building sprees, armies of consultants, and major cost reduction initiatives. Hospital leaders, previously known as “directors” and paid relatively modest salaries, now became “presidents” and “CEOs”; seven-figure incomes became commonplace. The safety and quality movements created even more performance pressures on hospitals, increasingly challenging the pedagogical imperative to allow trainees graded autonomy and pushing faculty to see more patients, particularly well insured ones. Writes Ludmerer:
As market forces became stronger and more hostile, it was understandable that academic health centers became more businesslike and adopted corporate strategies. Yet as they did, an extraordinary inversion occurred: they began to lose sight of their mission and raison d’être. Academic health centers had always needed to do well financially so that they could do good work. Now, increasingly, doing well rather than doing good was becoming the end in itself, reflected in the high priority institutional officials gave to market share and financial return and the minimal consideration they gave to how the restructuring was affecting education and research.
At UCSF, we’re lucky to have a strong tradition of collaboration and collegiality between our medical center leadership and “the school side” – the departments and the dean. (Lucky, I say, because in some institutions this relationship is famously poisonous. Some universities have had to hire mediators to handle disputes; I know of one AMC in which the dean and CEO refused to speak to each other for years.) While collegiality is nice, the bottom line remains the bottom line. In the face of California’s budget woes, this year our medical school is awash in red ink, while the medical center recently announced a fiscal year profit of $150 million. At UCSF, as at most medical schools, the dean and department chairs are left to negotiate, and beg, for support from the medical center, which holds most of the dollars. Requests for medical center support generally have to be framed in clinical (rather than educational or research) terms, since the latter are deemed “the job of the school.”
How Penn Became Different
In 1989, after suffering losses of $30 million in the two prior years, the Hospital of the University of Pennsylvania was looking for new leadership. William Kelley, the chairman of medicine at the University of Michigan, had become legendary in academic circles. A prominent academic rheumatologist, Kelley had transformed Michigan’s department from an also-ran into one of the jewels of American medicine, with an aggressive growth strategy and a businesslike management approach. One of Kelley’s former colleagues once told me about what happened when Kelley wanted something from one of his faculty. The faculty member would enter Kelley’s office; often, he or she would not be invited to sit down. “I need you to [FILL IN THE BLANK (see more patients, come to grand rounds, get more grants)],” Kelley barked. He’d then turn around and return to his desk. “That is all,” Kelly would say, leaving the faculty member to slink back to his or her office.
Staring at losses as far as the eye could see, Penn was not terribly concerned about finding warm and fuzzy leadership, and Kelley seemed like the right guy to run the medical center. But Kelley, a skilled negotiator, would only agree to come to West Philadelphia under his terms: he wanted to be both dean and hospital CEO. Penn president Sheldon Hackney agreed, imbuing the position with unique authority.
Kelley enjoyed some early success, and by the early 1990s Penn’s future seemed bright. Kelley began a buying spree, acquiring hundreds of private practices and several local hospitals. I remember hearing him address our department at a retreat around 1993. While his acquisition strategy didn’t make much sense to me, I left his powerful presentation (he spoke for 30 minutes without notes, and he simply oozed gravitas) assuming that I just wasn’t smart enough to understand it.
Unfortunately for Penn, the strategy didn’t pan out. On February 17, 2000, after about seven good years and three very bad ones (culminating in $300 million of losses), Penn president Judith Rodin asked for Kelley’s resignation. “Academic medical centers like ours face enormous financial challenges today,” Rodin said. “This is not a time of expansion. Rather it is a time requiring integration, tight fiscal management and a highly strategic focus on investments.”
After hearing of Kelley’s firing, a close colleague of mine quipped, “Bill Kelley was a great stock to own in a growth market.”
Penn has gone through a few leaders since then, most recently the legendary Arthur Rubenstein, who is stepping down after a successful decade-long tenure. Under the gentlemanly Rubenstein, Penn returned to profitability and respectability: both the medical school and the hospital are firmly in the top ten on their respective US News and World Report lists. Rubenstein implemented a more transparent budgeting process to allocate resources across Penn’s tripartite mission, resulting in a major increase in research and educational support, and he formed a single governing board for all of Penn Medicine (school and hospitals). When Rubenstein announced his plans to step down next July, Penn began searching for another leader whose skills were a match for the unmatched power in the combined dean/CEO position.
The Choice of Larry Jameson
They found Larry Jameson, the dean of the Northwestern University Medical School. I’ve known Larry for nearly a decade, from the time when he was chair of Northwestern’s department of medicine, and particularly through our four years together on the ABIM board. He is one of the most impressive leaders I’ve met in medicine. He has impeccable academic credentials (an academic endocrinologist, he is an editor of Harrison’s, the most popular medical textbook, writes an influential textbook of endocrinology, and is the author of 300 peer-reviewed articles). He is brilliant, thoughtful, and insightful, and he has tremendous integrity and a delightful sense of humor. He is as good a listener as he is a speaker. At Northwestern, he has been highly supportive of the hospitalist program, of educational innovation, and of interdisciplinary research and clinical initiatives (for example, he has brought in engineers to help with process improvements, and consulted with the business school to help with management training). While Larry may look like he stepped out of Central Casting to play a character in a Gatsby party, he is actually quite down-to-earth and approachable.
The job of running an AMC is already nearly impossible and threatens to grow even harder, as money gets tighter and accountability for outcomes and efficiency escalates. While having a unified dean/hospital CEO is no guarantee of success – witness the sad denouements of both Bill Kelley and, more recently, James Madara of the University of Chicago – I believe that placing a single individual on top of the heap increases the probability of correctly balancing the multifaceted missions of today’s academic medical center.
But it has to be the right person. Like Larry Jameson.